Found 287 article(s) in category 'Trade Policy'

Globalization, Inequality and Welfare

Globalization, Inequality and Welfare. Pol Antras, September 19, 2016, Paper, “This paper studies the welfare implications of trade opening in a world in which trade raises aggregate income but also increases income inequality, and in which redistribution needs to occur via a distortionary income tax-transfer system. We provide tools to characterize and quantify the effects of trade opening on the distribution of disposable income (after redistribution). We propose two adjustments to standard measures of the welfare gains from trade: a ‘welfarist’ correction inspired by the Atkinson (1970) index of inequality, and a ‘costly-redistribution’ correction capturing the efficiency costs associated with the behavioral responses of agents to trade-induced shifts across marginal tax rates.Link

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The False Economic Promise of Global Governance

The False Economic Promise of Global Governance. Dani Rodrik, August 11, 2016, Opinion, “Global governance is the mantra of our era’s elite. The surge in cross-border flows of goods, services, capital, and information produced by technological innovation and market liberalization has made the world’s countries too interconnected, their argument goes, for any country to be able to solve its economic problems on its own. We need global rules, global agreements, global institutions.Link

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Made in the World – Global Production: Firms, Contracts, and Trade Structure

Made in the World – Global Production: Firms, Contracts, and Trade Structure. Pol Antras, 2016, Book Chapter, “Global Production is the first book to provide a fully comprehensive overview of the complicated issues facing multinational companies and their global sourcing strategies. Few international trade transactions today are based on the exchange of finished goods; rather, the majority of transactions are dominated by sales of individual components and intermediary services. Many firms organize global production around offshoring parts, components, and services to producers in distant countries, and contracts are drawn up specific to the parties and distinct legal systems involved. Pol Antràs examines the contractual frictions that arise in the international system of production and how these frictions influence the world economy.Link

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Why Voters Don’t Buy It When Economists Say Global Trade Is Good

Why Voters Don’t Buy It When Economists Say Global Trade Is Good. N. Gregory Mankiw, July 29, 2016, Opinion, “One defining characteristic of recent political debate — in the United States and abroad — is anxiety about foreigners. You see it in Donald Trump’s railing against immigrants and trade agreements. It may well be part of Hillary Clinton’s shift, under pressure from Bernie Sanders, against the Trans-Pacific Partnership, which she once embraced as “the gold standard in trade agreements to open free, transparent, fair trade.Link

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Product Mix and Firm Productivity Responses to Trade Competition

Product Mix and Firm Productivity Responses to Trade Competition. Marc Melitz, July 2016, Paper, “We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multi-product firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets – and the induced product mix reallocations – induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial – and explain an important share of aggregate productivity fluctuations for French manufacturing.Link

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The ‘China, Inc.’ Challenge to Global Trade Governance

The ‘China, Inc.’ Challenge to Global Trade Governance. Mark Wu, May 13, 2016, Paper, “In the past decade, the World Trade Organization (WTO) has adjudicated over forty disputes involving China and other powerful economies. These cases are often trumpeted as a sign of the enduring strength of the trade regime and the efficacy of international law in managing geopolitical tensions associated with China’s rise. This Article suggests that this positive assessment obfuscates dangers lurking on the horizon. It explains why the rise of China presents a major challenge to the multilateral trade regime. At the heart of this challenge is the fact that China’s economic structure is sui generis — having evolved in a manner largely unforeseen by those negotiating WTO treaty law.Link

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Fairness and Free Trade

Fairness and Free Trade. Dani Rodrik, May 12, 2016, Opinion. “The global trade system faces an important turning point at the end of this year, one that was postponed when China joined the World Trade Organization almost 15 years ago. The United States and the European Union must decide whether they will begin to treat China as a “market economy” in their trade policies. Unfortunately, even as the battle escalates over the course of this year, the terms of the choice ensure that nothing will be done to address the global trade regime’s deeper flaws.Link

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The Economy Is Rigged, and Other Campaign Myths

The Economy Is Rigged, and Other Campaign Myths. N. Gregory Mankiw, May 6, 2016, Opinion, “If you want to learn about the economy, there are good and bad places to go. Probably the worst source of reliable information is the current crop of presidential candidates. Dissembling and exaggeration are no strangers to politics, but this year’s campaigns have been particularly egregious.Link

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Firms’ Preferences over Multidimensional Trade Policies: Global Production Chains, Investment Protection and Dispute Settlement Mechanisms

Firms’ Preferences over Multidimensional Trade Policies: Global Production Chains, Investment Protection and Dispute Settlement Mechanisms. Dustin Tingley, April 16, 2016, Paper. “In addition to the conventional focus on market access, recent trade agreements have included investment protection, dispute settlement mechanisms, and escape clauses that enhance flexibility. We argue that preferences over these newly salient dimensions of trade policy will vary by firm, not by industry, and that a firm’s preferences will depend on its insertion into global production networks. To estimate a firm’s preferences over multiple policy dimensions, we conduct a conjoint experiment on firms in Costa Rica, a middle-income democracy in the developing world. We find that investment protection is the most salient trade policy dimension for firms who are most deeply integrated into global production networks. In addition, strong dispute settlement procedures are most valued by exporters who are not central to global supply networks. Furthermore, we find few differences across industries, thus challenging the conventional focus on inter-industry distinctions in the trade policy literature.Link

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